Egypt's Palm Hills shrinks Q1 net loss
Cairo, May 15, 2012
Egypt's Palm Hills, the country's second-biggest listed developer, said on Tuesday it had narrowed its first-quarter net loss as operating costs declined.
The luxury real estate developer posted a net loss of 16.3 million Egyptian pounds ($2.7 million) in the first quarter of 2012, compared with a loss of 36.2 million pounds in the same period a year earlier.
The firm, battered by investigations into previous state land sales and by client cancellations after the uprising that toppled Hosni Mubarak last year, has made few new sales in the year since the uprising.
Revenue for the first quarter fell to 29 million pounds from 193.5 million in the same period a year earlier.
Its operating costs dropped by 91 percent from 201.7 million pounds in the first quarter of 2011 to 17.7 million pounds, which analysts said could be an indicator of a lower rate of cancellations and slower construction and deliveries.
The company is just one of several real estate firms in the Arab world's most populous country facing legal challenges relating to their land holdings since a court ruled that a sale of state land to Talaat Moustafa Group (TMG) was illegal because it was not auctioned.
TMG's first-quarter net profit rose 2.5 percent as sales rebounded from the same period of 2011.
Palm Hill Chairman Yasseen Mansour and former housing minister Ahmed el-Maghrabi were cleared of corruption charges in a state land sale in July.
But the company is still awaiting a verdict from another court on whether the contract for the sale of a land plot should be scrapped.
Palm Hills shares slid 3.5 percent at 1041 GMT, while the benchmark index dropped 0.9 percent.-Reuters